Skype, the Internet telephony firm owned by eBay, made a powerful brick-and-mortar ally: Wal-Mart Stores. On Monday, the world’s largest retailer said it will start selling Skype calling cards, an element in the discount giant’s new electronics onslaught.
Skype accessories will be offered in 1,800 U.S. Wal-Mart locations. But CNBC’s Jim Goldman reported that the deal could have much more impact than the value of the calling cards and individual pieces of hardware and software alone.
Firms like Motorola, Logitech and Plantronics have been manufacturing Skype-compatible equipment, generally selling the products through consumer-electronics chains such as Best Buy and Circuit City Stores. But now, all the Skype gear will be available at one location: Wal-Mart. Which means undecided potential users can not only find all the needed parts for a Skype hookup more cheaply, but can buy them in one impulsive shopping sweep.
Voice-over-Internet Protocol (VoIP) typically enables consumers to call abroad for free, or at a fraction of conventional prices, via computers, mobile and land-line phones, bypassing steep carrier toll charges.
EBay Chief Executive Meg Whitman was criticized when the Web auction house bought Skype for a cool $2.6 billion; but the VoIP provider doubled its subscribers in eBay's recent third quarter, compared with the year-ago period, and posted $79 million in revenue –- up 123%.
Consumer research firm In-Stat predicts that the VoIP market will grow four-fold by 2010. If analysts are right, economic growth outside the U.S. will continue to outpace the U.S., rendering Skype and PayPal, eBay’s international Internet money-transfer service, more valuable.
Joining best Buy and Circuit City in the potential loser’s circle: Vonage. The rival VoIP firm already sells its wares in Wal-Mart; but as Goldman points out, Vonage is about to come face-to-face with an aggressive competitor –- one backed by big pockets.
Wal-Mart has been pursuing electronics aggressively, expanding its selection of high-end products -- like 32-inch LCD TVs for under $500 -- to lure customers into its stores and gain market share.
Those efforts have pressured Best Buy and Circuit City Stores. Earlier this year, Circuit City announced plans to close stores and replace 3,400 high-experience employees with lower-paid workers.
In addition to the Skype news, Wal-Mart also said its larger selection of electronics would include new home-theater systems by Philips and Sony, and a wider assortment higher-definition TV, including more sizes from Samsung.